1) What was the first car you fell in love with?
Dana Mecum: The first car I fell in love with was actually a motorcycle. When I was 14, I had a Honda 125 for off-road use, however I did ride it on the highway and freedom was found.
How my passion for cars relates to my business? There’s a fine line there. Again, my father has been selling cars for close to 60 years now, so I grew up around selling cars. I have just as much a passion of making a deal as I have a passion for a car, so oftentimes it’s caused conflict in my business life. The way I’ve been able to raise and provide for my family has been selling cars. Over the years, there have been times I’ve made a poor decision and not sold the car because I liked the car more than the money. At times this has created a conflict. There are cars that I’m really in love with and fascinated by, so the way those cars usually get sold is the intrigue or the art of the deal outweighs my passion for the car.
2) What prompted you to start Mecum Auction?
My father has always motivated me a lot and in the 1960s he was the largest fleet salesperson in the world, so I was always around large groups of cars. Back in the 1980s, Jar Tran (similar to a U-Haul truck rental company) went bankrupt and so we had to go all over the country to round up their trucks. My dad sold those 10,000 trucks off over a year-and-a-half period. It was such good business that I decided I’d get in the truck business. I went out and bought a fleet of over-the-road tractors and, low and behold, I didn’t know how to sell them. So I traded some of them for low income rental property and after a month or so, I knew that being a landlord was not the direction I wanted to go. I ran across a guy with 40 collector cars, so I traded the tractor fleet for collector cars. I already had 25 of my own collector cars, so I had a big inventory. It was early in my business life, though, and I needed to sell these collector cars because I had absolutely everything wrapped up in them. At the same time, in the history of the collector car auction business, there were 3 original auctions: Auburn in the fall, Arizona in the winter and one in Rockford, Illinois, called April in Rockford. That event the year before, in 1987, closed it down so here I am in 1988, they are not having it and I have a big fleet of cars, so I decided to have a collector car auction and add some consignments to it. At the end of our first auction, everything blew down after a tornado came through and that lead to everything else. The silver lining of the tornado was we got press we wouldn’t have had otherwise. The original plan of selling some cars evolved quickly into overcoming the fallout from the storm, thus a second auction.
3) What is Mecum’s specialty and why?
Our specialty is customer service. And the reason why is, I was a customer at other collector car auctions before I became an owner and promoter, and so some of the things about how we run our business today are in memory of my experience as a customer of other auction houses. One of the things we do that I feel is very important is same day pay where we pay the seller at the same event (although, sometimes it’s 2 or 3 days later with absent buyers and getting the money collected but we still pay virtually immediately). This stems from when I was younger and I had little boys ages 5, 3, and 1. I took my cars, which was every penny in the world I had, and when I sold them, I didn’t get paid and it was almost 5 weeks later before the promoter paid me. Here I was trying to raise a family and I couldn’t do anything and I couldn’t reinvest all that time, so I’ve always kept this in mind…that a person has a reason to sell their car: they need the money for personal reasons, or they’re in business, and they’re entitled to that money as quickly as possible.
Another thing that sets us apart is our very reasonable commission structure. Our commission is 6 percent, whereas if you compare all other auction houses charge 10 percent or more. That’s a big difference on what goes into the pocket of the seller. We’ve always felt we’re earning a commission, but the lion’s share should go to the person that owns the car. That’s part of our philosophy, our customer service. Yes, we do advertise, but our biggest push is for repeat business because I was taught your best customer is a repeat customer, rather than having to look for new customers all of the time.
4 & 5) How is the classic car business being affected by the current economic crunch? And are muscle cars as vulnerable to this crunch as other classic cars?
The collector car market as a whole is in good shape – great shape – compared to a lot of businesses. Prices are naturally going to drop but not a drastic drop. We see most prices ending up around the 2004 level.
The collector car dealer is greatly affected by the economy due to the credit crunch. As a whole, dealers need credit for inventory. The end consumer of collector cars has pretty much always been a “cash trade” item. And that’s a big reason why we have not seen a market calamity like other markets. We have a cash item with supply still lower than demand.
6) If you were new to investing in cars, what would you buy?
That’s the same lesson I’ve preached for years…any buyer should buy what they have an interest in. Did you ever try to sell something you didn’t like? You can’t! If there comes a time you want to sell it, for whatever reason, it’s easier to sell something you have an interest in or that you have fun with. You should have a passion in your investment. Guys I see that come in and buy only for the monetary investment usually don’t last very long; they’re in and out of it in, say, 2 to 3 years. Guys like researching the history of the car, guys like to drive them and go to vintage races or to car shows where they can meet and talk with like owners. But some guys buy because they just love to look at them. It’s like having a guy who grew up in the 1960s and has a muscle car; it’s like a switch that turns on his memories from in the “back in the day.”
7) What is your advice to those who have never purchased or sold a car at an auction, but would like to?
The first thing I would say is don’t go alone. Take someone with you because you’ll want someone else so you can voice your opinion and thoughts to. Be sure to go early, this is the single biggest thing you need to do if you’ve never been to an auction before. Don’t be fashionable and just show up when it starts. Take the time to watch and to learn and be sure to ask questions. If you’re at an auction, you should feel free to ask a ring man or an auctioneer any questions you may have, but just ask them during a slow time. They are very willing to answer questions and to assist the customers. If the staff is not helpful, that doesn’t mean the auction industry is bad, it simply means you should be in a different auction house. Auctions aren’t for everyone. It’s the way we conduct our business, but people are wired differently, so they’re good for people that understand how it works, the type that they can make a decision and bid quickly. However, some people just don’t feel comfortable making a decision that fast and that’s why a dealer is so important. There’s that old adage: go home and sleep on it. Well, there’s nothing wrong with that. But, if you’re interested, go to a couple of auctions and watch and learn and see if it works for you before you jump in. Most auction houses have items that start out early in the day that sell for a couple hundred dollars. So, get active to see what it’s all about, but start out small. You can sit and watch and practice by pretending to pick out a car to bid on and make decisions like you’re in a fantasy bid – just don’t actually raise your hand! Just practice to yourself and be sure to watch the ring men and get involved in the process. The most important thing beginners should know is the auction houses provide ring men and they are there as a service to bidders to help people know what is going on and to assist them.
8) Why did you decide to work with HD Theatre and how has it changed your business?
We decided to work with them and the primary reason we wanted to be on television is we looked and noticed everyone loves these cars and we’re collecting a fee for selling these cars. We looked at the entertainment value: people like to watch and be involved. For us, it helped us to open up a new stream of income so we could attract sponsors. We now have a huge following. We had relied on print ads for everything in the past and our website does a tremendous service for us, but at the end of the day it doesn’t hold a candle to the television. People just love it! It helps us incorporate new people to bring them in as customers and it generates a lot of new interest for us. The biggest compliment we’ve had from our television involvement is we’re starting to have families show up because the kids watch it and want their parents to bring them. That’s the biggest compliment I have had. And more involvement and interest from the younger generation is tremendously good for the car collecting hobby. Because it’s starting to be an older generation of baby boomers and we need to see more generation X/Y involvement to transcend that.
Being on HD Theatre on Discovery and cable television and satellite television reaches many other countries around the globe, so, we’re also developing more loyal customers on an international level than ever before.
9) What made you want to set up an auction for Mecum during the Monterey car week? Did you envision it being so successful?
Primarily, Mecum has done a tremendous job of branding ourselves in the muscle car and Corvette markets. Our Monterey event at the Hyatt Regency Resort and Spa on the Del Monte Gold Course was held in a very large, open area with cars spread out under tents and on the golf course fairways. Our branding, which has been good, got a bit heavily skewed towards muscle cars and people we knew our whole lives thought we only sold muscle cars. We wanted to prove Mecum does sell other types of cars other than just muscle cars. We wanted collectors, the media and the industry overall to know we understand other cars to give us more of a basis with other make and model vehicles.
The other thing is the media always had two major drifts for 6 months of the year: Arizona before/after and Monterey before/after. We have a different customer base than the other auction companies do. But we felt it was time for us to show up at this mainstream venue. The other auction companies do a wonderful job, but they had gotten to the point that a $50,000 or $100,000 car was under the level they wanted to accept since they wanted bigger stars all of the time. We went there with the idea of falling into their formats and having a catalog auction; however, after going there, we’ll probably follow our Mecum DNA and have a large consignment auction. The other thing is the other auctions are conducted in the English style of auctioneering.
I think we introduced to Monterey audience to a whole new world, since our style is more mainstream American auctioneering. With this in mind, I had a client call me yesterday to say he enjoyed going to a “real auction.” With the British style, you sit down and you raise your paddle and you bid on the cars in a different fashion that we do at Mecum Auction. I enjoy the British way and those are some of the world’s greatest auctioneers since one man controls such a huge crowd; However, at our auctions we don’t have a big, fancy catalog and people wander around at our auctions and we change it up among several different auctioneers, so it’s a different style. This is the way most American auctions are conducted, with guys wandering around and going up on the stage when it’s their car’s turn so we believe we’ve added a refreshing atmosphere to the other; more traditional English style Monterey auction formats.
Yes, I thought we had a good combination. I knew from the start that we had a better facility and overall venue for the Monterey audience. While other auction companies are operating in a cramped environment with their downtown hotel settings, we slid in under the radar and secured a tremendous facility with a lovely golf course right next door that has the ability to park 400-500 cars right there on the grounds. So, the Del Monte golf course also had plenty of easy access with plenty of convenient parking for our customers. I knew we were going to have a successful event logistically because of our venue and I also knew we had some great cars. I realize there were a lot of people that didn’t have the opportunity to see us simply because there’s so much going on, but we did try to select a timeframe when there weren’t a lot of other conflicts. I’m hoping more people will know about us and check out our event next year.
10) Why did the Shelby Daytona Cobra Coupe do so well? Is it because of the location at which the auction was held?
The Shelby Daytona Cobra Coupe did well because, even though it set a record for the highest price paid for an American car at public auction, it is potentially also the bargain of the year. Ferrari GTOs are in excess of $20 million with none available and 36 of them were built. The Shelby Daytona Cobras beat the Ferrari GTOs and only 6 of them were ever built.
Yes, the location was important. It creates a great halo; however, the end purchaser did follow the Daytona at Indianapolis in May. Our expectations in May were around $10 million, which he was not willing to pay.
11) If you can say, any plans to add additional auctions to Mecum’s current layout and will Monterey will be part of the line-up next year?
We currently have six venues on our HD Discovery schedule and we would like to grow that to 8 to 10 venues in the next few years, so that’s another reason why we went to Monterey…if we’re going to continue our television show, there is no better place for people to see us on television than in Monterey!
12) What’s in store for the classic car realm? Where do you see it heading in the upcoming years?
The long-term collector car hobbyists are here to stay. A common denominator in determining the value and prices of cars has been centered around cars that were purchased merely as transportation when they were new versus a car that was purchased as a luxury item when it was new. Classic cars, muscle cars and the world’s sports cars of the ‘50s and ‘60s, like the Ferraris, these are 3 segments that are the most collectible right now. What do they have in common? When they were new, they weren’t general transportation, when they were new, they were special…a guy bought a Ferrari to go racing and the same with Dusenbergs, they didn’t go back and forth to work. That’s why there are so many Mach 1’s and Chevelle 454’s left nowadays; they were bought as a personal item, not as a piece of equipment….just any 4-door sedan would be worn out and thrown away, but, muscle car owners always took good care of them since the time they were new, it was a personal reward to own one.
13) Finally, of the modern day muscle cars (i.e.: new Camaro, Challenger or Mustang), do you have a personal favorite and why?
I guess the best example is I used to open up Hemmings based upon what I was interested in. I have broad interest so, to have a favorite, probably not. But, if I had to say one model right now, it would be Camaro, but this is based on the fact that I have significant Camaros in my personal collection. Camaros are just what I happen to own right now.
Special thanks to Dana Mecum for taking the time to conduct this interview and good luck to you and Mecum in upcoming auctions.
To learn more about Mecum auctions head over to Mecum.com